Friday, October 30, 2009

Creative destruction

Destruction. It comes in several forms. There is the creative form of destruction, a concept first popularized in 1942 by economist Joseph Schumpeter (“Capitalism, Socialism and Democracy”). Originally creative destruction was an explanation of the dynamics of how entrepreneurial innovation can cause transformation, dislocation and destruction of older, more established enterprises. The compact disk replaced the 8-track tape, to then be replaced by .mp3 player. More recently creative destruction was reenergized by Foster and Kaplan of McKinsey and Company (“Creative Destruction”), more as a strategy for remaining competitive and thriving over the long term. Instead of, if it ain’t broke don’t fix it, this is more like, if it ain’t broke, break it. Then there is the increasingly widespread destruction wreaked on the economy as a result of lending far too much to far too many for far too little for far too long; the subprime mortgage meltdown. Not creative at all. Destruction, creative or not, is painful, involving dislocation, discontinuity, job loss, bankruptcy and economic upheaval. Destruction brings change. Change is a pain. It is inevitable, though. And change may mean that you will have to tell someone a bit about yourself.
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